However, as demand for these minerals surges, the primary producers — mostly developing countries — continue to grapple with the resource curse, a paradox where resource-rich nations fail to effectively leverage their natural wealth. This situation presents a critical challenge for the developing countries.

The pertinent question then arises: how can developing countries circumvent this paradox, instead, reconfiguring their economic framework to ensure fair, sustainable and inclusive economic growth?

As a middle-income country and the third-largest democratic country, Indonesia is positioned uniquely at the juncture of the developing world. It has both the opportunity and responsibility to be part of the transformative economic model.

One policy we can zoom in on is the critical minerals downstream policy Indonesia is undertaking. The policy significantly increased the value of exports, such as in the case of nickel ore, which multiplied export value from Rp 17 trillion (US$1.06 billion) a year before the downstream policy to Rp 510 trillion afterward.  

While few cast doubt over the capability of Indonesia’s nickel smelters to create high-added value commodities for industry, the move itself has been the subject of ongoing disputes at the World Trade Organization (WTO) with the European Union. Indeed, the EU argued that Indonesia’s action violated several articles in the 1994 General Agreement on Trade and Tariff (GATT).

However, interestingly, Indonesia’s downstream policy is conducted in a broader framework that puts our line of thinking in questioning the prevailing trade paradigms. It advocates for a reevaluation of global trade policies.  

Let’s try to look at this from this development perspective.  

According to a study from the United Nations Trade and Development (UNCTAD) in 2024, there are 95 commodity-dependent developing countries – almost half the entire UN membership. This includes 66 percent of small island developing states and 83 percent of the least developing countries. In fact, the list has grown by 15 countries in the last 15 years.  

This worsening situation signifies that the status quo does not work.

Now is the time to update our policy and trade regime. The decades of dependence on commodities have not significantly advanced the economies of many commodity-dependent developing countries. This situation indicates a dire need for change and transformation. 

UNCTAD secretary-general Rebeca Grynspan articulates this concern vividly, labeling commodity dependence as the Triple A – "a trap of development, a cycle of vulnerability and a source of inequality". This pattern stymies economic diversification and exacerbates poverty and instability across developing countries. 

Indonesia has experienced first-hand the pitfalls of heavy reliance on raw material exports, particularly during the early 2000s until 2012, which led to significant current account deficits whenever global commodity prices faltered. Such economic vulnerability once categorized Indonesia as a high-risk country, highlighting the need for strategic economic realignment. 

Responding to these challenges, the Indonesian government has strategically shifted toward policies that restrict the export of raw materials and encourage the downstream processing of natural resources, such as nickel ore.

This initiative not only adds value to our exports but also significantly reduces our susceptibility to the Dutch disease—a situation that can have developing countries falling into a trap where the commodity sector grows at the expense of other sectors.  

While its action remains one subject of trade disputes with the EU in the WTO, Indonesia can use its policy to secure its national priorities for poverty eradication, job creation and value-addition to commodities.

Through these efforts, Indonesia has stabilized its trade balance, strengthening domestic policy and structural transformation in critical mineral industries. It has spurred domestic employment and industrial growth, enhancing our overall economic resilience as well as the attempt to implement the environmental, social and governance (ESG) principles. 

Some of these stories were shared by the Indonesian delegation at the UNCTAD Trade and Commodities meeting at the end of last month, which spurred inspiration for other countries and the UNCTAD secretariat regarding Indonesia’s downstream policy to leverage its commodities in order to realize a just, fair and sustainable management of critical minerals. 

However, Indonesia's efforts alone are insufficient in the global scheme, especially when it comes to addressing a systemic challenge. There is a pressing need to update the global policy and trade regime that can support developing and commodity-dependent countries to escape from the Triple A mentioned above. 

Indonesia’s journey represents just the beginning, yet it serves as a powerful beacon for equitable development. This path demonstrates a transformative approach that enables countries to turn commodity dependence into a sustainable development with tangible benefits for all.  

This call for reform is imperative because we cannot let the status quo continue to entrap developing countries from their potential development. We need to democratize multilateralism to ensure all nations have equitable influence over the improvement of trade regimes that can provide shared prosperity for all. 

This year, UNCTAD celebrated its 60^th anniversary. We will also commemorate the 70th anniversary of the Asia Africa Conference, also known as the Bandung Conference, in 2025. The significance of this anniversary lies in its call to action. It is a potent reminder of what can be achieved collectively to address the challenges of commodity dependence and inequality.  

In this regard, this celebration shall create the right momentum to galvanize the Global South toward unified action against the persistent threats of development traps, inequality and vulnerability. 

On this note, UNCTAD is poised to play a more important role, especially taking into account its long-standing support for developing countries through capacity building, technical assistance, sharing best practices and building intergovernmental consensus.

Through UNCTAD, developing countries can strengthen their cooperation and the enduring relevance of the Bandung Conference of 1955, including on the issue of critical minerals.

Indeed, the Bandung spirit, which promoted solidarity among nations against colonialism and economic disparities, is more pertinent than ever. It supports our contemporary demands for a fairer global trading system. 

Through mutual respect and collective effort, we can chart a new path to a more equitable global community, ensuring that no nation is left behind. 

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The writer is the Indonesian ambassador to the United Nations, World Trade Organization (WTO) and other international organizations in Geneva, and president of Trade and Development (TDB) of UN Trade and Development (UNCTAD).